D OLL A R T R E E

L OGIST IC S C A SE
ST U D Y
Subtitle: Analysis and Recommendations

Group Members:

• Mohammad Islam 100433406

• Denial

• kapil
 Founded in 1986 by K.R Perry.
History and
Overview: Went public in 1995

Over 2,600 stores in 48 states by

2004
$3.2 billion in revenue
Dollar
The concept first emerged It saw a resurgence in
Retail in the 1950s. growth during the 1980s.

Category
The evolution of the
This growth was driven
concept included the
by stable inflation and the
introduction of
ability to source products
customized product
inexpensively from Asia.
packaging.
Dollar Tree Strategy

 Unique Positioning:
o All items priced at $1

o Store sizes and locations in strip shopping centers.

Example: Emphasize easy access, ample parking, and
proximity to other essential retailers to attract foot traffic.
o Product range: consumables, variety merchandise,
seasonal goods
o Significant portion of goods are imports
Logistics System

 Importance and Design:

o Crucial for quick turnaround and
low costs

o Strategically located and automated

DCs

o Focus on scale, utilization, and

continuous improvements
Distribution Centers

 Capacity and Efficiency:

o 9 DCs with 5.4 million square feet by 2004

o Automation started in 1998 for handling

SKUs

o Cross-docking for high-volume items

• 15% CAGR in DC productivity over four years

Inbound and Outbound Logistics

Inbound Logistics: Outbound Logistics:

Over 40% of goods imported, mainly from China Weekly shipments to stores by third-party fleets
Consolidated into full containers for shipment Cost structure based on round-trip miles and
Containers sent directly to DCs or via trailer unloading charges
trucks
Capacity Expansion
Options

 Future Planning:
o Potential capacity shortages at Briar
Creek DC

o Expansion options:

 Expand Briar Creek DC by 400K

square feet

 Build a new 600K square-foot DC in

Hartford, CT
Financial Performance

 Key Metrics:
o Robust financial performance

o Consistent increases in sales and EPS

o Efficient logistics contributing to higher

growth rates and profit margins
 • Strategic alignment of logistics and
merchandising is critical
• Expansion to Hartford, CT is the
Conclusion and Conclu most viable option for long-term
sion: growth
Recommendations

Group • Justification based on scalability and

Vote:
Build cost-effectiveness
New
DC in
Hartfor
d